Hey Gents,
Got a call from the advisor who put my mom into a variable annuity about 8 years ago. He's suggesting to move her into an indexed annuity in order to protect her income from any losses that may come (whether that is in a year or two).
He is suggesting a lincoln optichoice indexed annuity:
https://www.lfg.com/LincolnPageServer?LFGPage=/lfg/acc/fprod/ann/indann/index.html&LFGContentID=/lfg/acf/prd/irp/ocfia/indaccThe annuity has no fees and gaurantees the principal. The way the annuity works is that it counts the monthly gains or losses through the year, and if the losses are negative, the account does not take those losses. If there are gains, the account is capped at 1.7% (or a similar number) per month.
My thoughts:
Obviously the variable annuity probably wasn't the best choice back in 07-08, but I don't think she knew better.
She is mustachian/super frugal. House and car are paid, I don't know her exact monthly expenses but I'm confident she will not touch this money.
At the same time it is her money and if she needs it I want it to be there for her.
I am a little wary of another annuity, however it seems there is no cost, it removes the risk of loss, and she has some opportunity to gain (although it is reduced). If she wants to safeguard her money entirely she could take it out of the market, but I don't know that that's necessary.
Anyway, what are your thoughts?